Budget Statement

Lord Hunt of Chesterton Excerpts

Wednesday 25th March 2015 Lords Chamber

[Lord Hunt of Chesterton (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria. I slightly wonder what country he was talking about, given all the things he referred to, such as worker participation in companies, which the British helped to introduce in Germany after World War II.

This debate should be an opportunity to talk about the economic policy and future prosperity of the UK. I declare my interests in one or two companies. As other noble Lords have said, the speech’s historical analysis seems slightly deficient. There was clearly an enormous crisis, which was not made in the UK. After the crisis, countries responded to it in different ways. Some, such as the United States, immediately stimulated their economy, while others, including the UK, were flat. If you compare the process of coming out of a slump or a crisis to walking up a mountain, there are two ways of doing it. One is to find a nice gentle slope to the top of the mountain, which America did, and the other is to go absolutely flat and then find the steepest place to climb. Obviously, while you are climbing up the steep slope you are climbing more metres per second than those on the gentle slope and then, as the Government keep saying, for one year you do better than other countries. It is a strange kind of geometrical definition.

The important point is that, for most countries, the fundamental aspect of the economy—nobody has really talked about this—is the ownership of the country’s main businesses and the economic relationships with other countries. Neither was really mentioned in the Minister’s speech or, indeed, in the Chancellor’s speech. Financiers in the public and private sectors in the UK do not seem to regard the ownership issue as important. Indeed, the City and the Treasury relish every opportunity to sell off what remains of the UK’s large industrial businesses. We read articles saying that this is a bad month because we not selling off any industry. We have seen this with more and more of our major industries in the UK. In aerospace, Airbus is taking more control. In trains, we have now sold off the Channel Tunnel, where we had a successful public sector. I was talking to a significant manager in the nuclear industry, who said that all nuclear work here is now owned by foreign countries. We have a nuclear programme, which is very welcome, but it is all owned by other countries. We had major world industries in motor cars, electrical engineering and chemical engineering. The noble Lord, Lord Taverne, raised this question: if we lose ownership of all these companies and lose the entire strategic planning of this country, how can we possibly become a world-class country working around the world?

UK engineers and scientists—I declare that I am an engineer and an honorary fellow of the Institution of Civil Engineers, which is where I have had these conversations—recognise that if the countries which own these industries are abroad, that is where the important, interesting design is taking place, such as Hitachi’s nice train which will arrive here. Who did the design? It was done in Japan. Are we going to build them? Yes, but all the design was done in Japan. Of course, there is one way—I have debated this with the Minister before—which is for us sometimes to have a golden share, and then of course we have control, as with Rolls Royce. Why is there only one company with a golden share? We want lots of golden shares, and then we would operate around the world.

This year, of course, we had the near catastrophe of losing AstraZeneca, a major pharmaceutical company. I am glad to say that now, with the help of other European countries, that remains in the UK and will provide a tremendous opportunity for research and development here, and indeed for operating round the world.

Where, then, is the mentality? One Minister, in a very excitable debate—I will not say who it was, as he might be embarrassed—got more and more excited and said, “The thing about this country is that we want to be the corner shop of the world!”. I think he made a Freudian error there. But that is exactly the point: the Government do think this is the corner shop of the world, not the workshop of the world, and that is the problem. It is about internal vision. The Treasury simply does not mind at all, as far as I can see. However, the Government do not seem to realise that if you do not own any industry, you do not control what you make and what you do. That is a logical point that other countries, such as France, Germany and America, understand.

Equally depressing in the Chancellor’s speech—and, I am afraid, in the speech of the noble Lord, Lord Deighton—was the absence of vision about the importance of the UK continuing to be at the heart of development of the European economy. The inwardness and short-sightedness of the Budget speech was breathtaking in that respect. However, two evenings ago I was fortunate enough to hear the vision of the new Commissioner for Science in the European Commission, Mr Moedas, an engineer from Portugal. He called for the continuing role of the UK, with its extraordinary science and technology, in Europe, but he was too polite to mention that the UK is not in the lead in R&D investment as a proportion of GDP. Therefore, it is very important that we remain in Europe; perhaps the Minister might refer to that in his wind-up.

My final point is on the Government’s support for small and regional industry. I welcome the emphasis on working in the regions and the greater development of the regions. It was of course not mentioned in the Government’s speech that after they came to power in 2010 they got rid of the regional development agencies. After some havering, they have now introduced the local enterprise boards. From a major speech last week by the leader of the Labour Party, we know that there will be no going back when the next Labour Government come to power. They will continue with the local enterprise partnerships, unlike their predecessor, who gave the bad example of immediately throwing that up.

However, I give credit to the present Government, who kept on with the Technology Strategy Board; they have now changed its name to Innovate UK, but that is fine. I am afraid, however, that there is no indication that the UK understands that it will not have its own world-class industrial companies unless there is significant investment in the UK ownership of those companies. Maybe the only way to do that is with the famous golden share, in which case we need more of those. Finally, it is important, as the noble Lord, Lord Taverne, said, that this should be the way we have a strong export sector, because at the moment the balance of trade and productivity problems are rather severe.

National Infrastructure

Lord Hunt of Chesterton Excerpts

Thursday 22nd January 2015 Lords Chamber

[Lord Hunt of Chesterton (Lab)]

My Lords, I welcome this debate, which was introduced by my noble friend Lord Adonis, and I am pleased to follow the noble Baroness, Lady Mobarik, who commented on the broader considerations of our infrastructure. Of course, when levels of pollution got too bad during the great stink, this Parliament had to abandon the area. Similarly, China has to stop activities when the pollution levels get too high. Sometimes they turn off all the factories in order to have clean days, which are called “APEC blue”.

This debate concerns what we do for everyone’s benefit in both the immediate and the long term by using the space below the ground, the shrinking space we have available at ground level, and the increasing value of the space above the ground—right up to the ionosphere, which is one of the most valuable parts of our infrastructure. The debate has embraced all aspects of our built environment, our engineering structures and our natural resources, which include the vital and invaluable element of radio communications. I found out the other day that “infrastructure” was not in my 1960 edition of the OED, although the French introduced it in 1875. The noble Viscount, Lord Ridley, pointed out that the French understand systems. Perhaps that explains the lack of UK investment in the broader infrastructure. In that area, the UK is now ranked 28th in the world, having fallen from 24th place. I declare my interest as an engineer and scientist and as a former head of the Met Office, a very successful government agency that is a world leader. Vis-à-vis the remarks of the noble Lord, Lord Sassoon, and others, it was criticised for generating excess profits.

The UK’s engineers, scientists, architects and landscape architects, of which my wife is a distinguished exemplar, have gained a worldwide reputation and have contributed to some of the world’s greatest infrastructure projects. Although there is some great infrastructure in this country, as my noble friend Lord Adonis said, there are many areas where we have failed. One of the points which other speakers have perhaps not emphasised is the need for an integrated approach. The suspicion of integrated systems mooted in this House by Lord Shackleton in 1976, when the idea of systems thinking in government began to be discussed, was exemplified by the noble Lord, Lord Sassoon. He suggested that any kind of integrated visionary commission would essentially hold things up. I believe that a proper UK system would not necessarily mean adopting a top-down bureaucratic approach, but rather a visionary commission that considers many factors: the environment, climate change, training and many other areas which have been mentioned in the debate. Of course, a visionary commission should also look to its rather unvisionary colleagues in the Treasury, whose job it is to find the money and make sure that it is properly spent. I believe that a commission as envisaged in the Armitt review would be very different from what happens in the Treasury.

The other important point about such a visionary commission is that it must devolve powers to the regions and the cities, to government agencies, and most importantly to industry. That will ensure interconnected planning, particularly for new forms of power, technology and transportation. The remarks of my noble friend Lord Liddle exemplify this point. Such a commission will also link the UK infrastructure system to the network systems in other countries. In Europe, we have an interconnected system for electricity and other interconnected systems for other aspects of our power and business, and that is an important role of the visionary commission.

I end by referring noble Lords to the remarkable concepts of Buckminster Fuller, the great visionary engineer, who talked about an electrified interconnection grid developing around the globe. We are now seeing this, for example, in Asia. That is the kind of visionary idea that the commission would be able to have, and I believe that that kind of openness is what we need.

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[The Commerical Secretary to the Treasury (Lord Deighton) (Con)]

My Lords, I thank noble Lords for an excellent, instructive debate; it has been thought provoking for me, absolutely. I congratulate the noble Lord, Lord Adonis, and endorse the point that the noble Lord, Lord Berkeley, made about his contribution and his receiving the European Railway Award. I was delighted that HS1 and Eurostar could get the noble Lord back here safely and on time to kick off the debate in a most interesting way.

This debate has also been useful in reinforcing the fact that infrastructure really does need to be centre stage: it is at the heart of our economic strategy—I think there is absolutely bipartisan endorsement of that. We have talked about the great opportunity that infrastructure brings, and we all agree that it is a key driver of economic growth. Transport, communications and energy systems help people and businesses improve their productivity, and as a result improve the rate of growth of the country. The construction projects, where we build them, are great short-term spurs to growth and skilled jobs. Infrastructure is also the key to unlocking growth in our regions. It is also a critical way of unlocking the housing growth that has been a big part of many of the contributions made by noble Lords.

The challenge, of course, is that historically we have underinvested, for a variety of reasons. What do we need to fix to cure that historical underinvestment? It has something to do with the shorter-term horizons of the political environment, which do not quite match the longer-term needs and gestation periods of investment in infrastructure. How do we tackle that more effectively? The noble Lord, Lord Adonis, referred to our ranking as 27th in the World Economic Forum. My noble friend Lord Horam was appropriately horrified by that. I should just point out that those rankings are a result of the home audience’s subjectively evaluating what it thinks of its own infrastructure, so it probably says more about the British psychology than about the objective state of our infrastructure. Noble Lords might listen more carefully to the IMF review.

[Lord Hunt of Chesterton]

According to the Institution of Civil Engineers, this ranking was developed for the World Economic Forum. It is rather topical.

[Lord Deighton]

It is topical, but it was still a subjective review of our own psychology. The IMF review in 2009 says that the UK has the fastest-improving infrastructure in the G7, which is clearly a good thing. We managed to get cross-party support for the Olympic Games. We started off with a Labour Government and a Labour mayor, and ended up with a coalition Government and a Conservative mayor, and there really was not a single slip when the baton was handed over because there was very effective cross-party support. I suspect that the nature of our immovable deadline—with Her Majesty the Queen’s parachuting into the Olympic Stadium on 27 July 2012—and our British fear of being embarrassed in public were probably helpful disciplines in getting us to that successful outcome.

There are three simple components to the Government’s plan to deliver our infrastructure more effectively: first, to have a plan; secondly, to have the money; and, thirdly, to focus on delivery so that we get it done very effectively in terms of the Government’s performance as a client and industry’s performance as the deliverer of that infrastructure. Everything that we have done as a Government has been about refining how we do those three things and making them better. I will therefore structure my comments and my responses to noble Lords’ questions around those three components of the plan.

We have a comprehensive, cross-sector plan; it is the national infrastructure plan—a number of noble Lords referred to it. It is a lot better now in 2015 than it was in 2010, simply because we have iterated it and built upon it, and we should do that every year. It was unfair of the noble Lord, Lord Adonis, to say that it is not really a plan. It is a plan and it does have timescales. At the beginning, it was a little more like a list of projects, but now it is a plan and is underpinned by a clear strategy. We have a road investment strategy: it is the road investment strategy which drove the list of projects which then enabled us to put a five-year funding plan in place.

I take on board the comments by my noble friend Lord Bradshaw that we need to invest early enough to get capacity right—the lead times on this are absolutely critical. My noble friend Lord Flight pointed out that the plan was improving. It is rather boring government: each year, each section gets a little bit better; each year, the strategy which we pull out of the departments responsible for those areas gets better. That refinement is going on. It is a plan that is backed and supported by industry; we work with industry to develop it; and it is a plan that has given industry and investors the certainty to plan against the pipeline which, because we have now been doing it for five years, they are just about beginning to believe in. We need to keep doing it over and again. Government’s work is done at the front end of that pipeline; that is, turning the concepts or solving the problems, and creating investable projects. As a noble Lord said, it is not the finance that is the constraint; it is shaping such projects into investable projects so that they can be carried out.

The claim I would make for this Government’s achievement is that we have got to grips with the short-term delivery challenges. We have put in place a plan to 2020-21. Many of the projects last through the 2020s. The next step is to develop a plan that addresses the UK’s infrastructure needs in the much longer term—which is where we should spend a moment addressing the case made by the noble Lord, Lord Adonis, for a national infrastructure commission, which was supported by many noble Lords here. I agree that the next stage of work is to look at our longer-term needs and to ensure that we develop strategies for them. Out of those strategies will come the work to develop the projects that will give us the outcomes that we are all looking for. I absolutely agree that that is the next stage of work.

I agree also that there is a significant role for independent expert advice. That was what we did in wrestling runway capacity in the south-east to the ground with the Davies commission. If one looks at the amount of work that has gone into solving one particular problem within one sector of the broader transport area, one sees that the kind of effort that we are talking about here is very broadly based. Defining the precise scope is an interesting question. The noble Lord, Lord Maxton, referred to the infrastructure of the internet. In the National Infrastructure Plan, there is a chapter on communications. The Government are producing a digital strategy just as they have produced a road investment strategy. So these things are all under way. I also accept the point made by the noble Lord, Lord Hunt, about integrated systems. We have very good plans for each sector, but we need to be much smarter in the longer term about understanding integration opportunities and interdependence. We have, too, to understand climate change; we have to understand the impact of technology. Those are all the things that we need to figure out.

The discussion that needs to take place on how we do this—my noble friend Lord Sassoon referred to it— is about how heavy we make the machinery to accomplish it. My experience in business and especially in government is that we need people who can get to outcomes, not people who can create layers of process. I am very nervous about signing up to quite heavily constructed process when my experience has been that what we need in government is the ability to get these things moving.

If that is where the plan fits in, let me spend a little time talking about the money. Our infrastructure is financed either publicly, from taxpayer money, or privately. Quite a lot of it is financed with a mix. Two-thirds of it is financed in the private sector. On the publicly financed component, we can effectively retain a good bipartisan approach, but I think that this Government have been very successful in stabilising our public finances, which is what has created the room for us to be able to spend more ambitiously on infrastructure. That is a big difference between the parties. The success in stabilising those public finances has been what through successive fiscal events has enabled us to invest more effectively in public infrastructure. On the public side, we are talking about the road network, the flood protection environment and Network Rail as the three key sectors. We have also made settlements that last right through the Parliament, which is the first time that we have ever done that. If I look at all the things that we have done in the past four years, turning a one-year financial settlement into one that lasts to 2021 has been the single most transformational thing, because those sectors can now plan, build and construct, and have much more effective delivery, by having that medium to long-term planning environment. It is absolutely transformational.

We need to work through the system to make sure that the agencies responsible, such as the Highways Agency, the Environment Agency and Broadband Delivery UK, have the skills to be able to work with industry to realise the full benefits of that longer commitment of public money. I am delighted that we have been able to finance some of the pet or favourite schemes of noble Lords; for example, the interest of my noble friend Lady Maddock in the A1 north of Newcastle and connectivity with Berwick. As my noble friend Lord Attlee pointed out, such a longer commitment is the key to avoiding the feast and famine of past years and getting the sequencing right. If you have a five to six-year settlement, you can sequence it intelligently through that period, rather than having to make sure that you have spent all the money in year 1 because you are never quite sure whether it is going to be there tomorrow.

I have talked about the fact that we in the UK are pioneers in private finance. We do private finance of infrastructure better than anybody in the world. We introduced privatisation; we introduced public/private partnerships—as my noble friend Lord Sassoon pointed out, unfortunately the PFIs were not always as well executed as they should be, but getting the balance right is hugely important. A number of things make the environment that we have got here right. We are a very attractive location for overseas investment. Of course, we cannot be complacent; we need to keep making it better. The noble Baroness, Lady O’Cathain, was very articulate about the stability of this marketplace, the clear property rights and our world-class regulation—which a number of noble Lords referred to, including my noble friend Lord Sassoon. Preserving the independence of that regulatory framework is critical. I am particularly pleased with the combined work that the regulators are doing through the new body that we set up, the UK Regulators Network, to focus on the key issues such as affordability, cross-sector infrastructure investment and how we engage with consumers to facilitate switching. The Government have also intervened in a variety of sectors to support financing, including the new electricity market reforms. The noble Lord, Lord Rooker, referred to nuclear and the way in which we are driving that forward. The noble Lord, Lord Liddle, talked about Cumbria. We are doing an enormous amount of work to get all three big nuclear projects off the ground—not only Hinkley Point, but also NuGen and Horizon. That will ultimately be for the benefit of the economy in Cumbria too. I agree with the noble Lord, Lord Whitty, that work is needed on the demand side of energy just as much as on the supply side. All these sectors are critical.

I support my noble friend Lord Horam in his call to accelerate fracking. We have put the planning environment and the tax incentives in place. It is now down to the developers to determine if the economics are there for them. My noble friend Lord Ridley said that there are alternative models—which other countries have embraced—for funding our roads. The noble Lord, Lord Rooker, backed this up.

The noble Lord, Lord McFall, talked about potential investment in infrastructure by the big insurance companies and the challenges they sometimes face. Of the £25 billion they said they would put up, £5 billion is already committed, so that is moving ahead pro rata. We have helped with making the Solvency II rules as benign as possible to support that development.

The third component of what we are trying to do is to get smarter on delivery, what we do in government and how we can help industry get better at it. We are much more focused on government intervention to unblock things in our top 40 projects. My noble friend Lord Marland referred to it as “energetic” and “enabling”—making sure that we have joined-up government. I ran an exercise in upgrading the commercial capability across the key departments. My noble friend Lord Cavendish correctly pointed out that it does not come that naturally to government. We have to ship in a lot of the commercial expertise; otherwise we are outgunned in big commercial negotiations. There is a lot of work going on there. We have put our top people in key leadership positions. Of all the things we have done in HS2, persuading David Higgins to be its chairman has probably been the single factor which will make most difference in the effectiveness of its delivery.

Many noble Lords made observations about the need to improve the planning system. That is part of the responsibility of government in enhancing delivery. We have done a series of things. My noble friend Lord Freeman referred to the national networks policy. The noble Lord, Lord Berkeley, referred to draining the swamps and trying not to listen too much to the frogs. At the next Budget, we will consult on CPOs, and ideas about how to financially motivate getting to the right point more quickly will be our underlying objective.

With industry, we have worked at ways to improve project initiation—how projects are set up and delivered. In the first three years we took £3 billion out of a big set of projects through working with industry and we are continuing that engagement to look at change in their own delivery. An important component is getting skills right. When I started this job, the construction companies came to see me to say, “We want work”. Now they say, “Slow down, because we do not have the capacity to deliver it all”. Skills are at the heart of this. My noble friend Lady O’Cathain was spot on when she said that the important short-term and medium-term challenges were to get that right. Apprenticeships are absolutely at the heart of that. I am delighted that we have the HS2 colleges set up in Birmingham and Doncaster. My right honourable friend Patrick McLoughlin, who is clearly doing a very good job as a successor to the noble Lord, Lord Adonis, was at Crossrail on Monday, celebrating its breaking through its 400-apprentice model.

I have not said much about rebalancing the economy, a subject which many noble Lords raised. The noble Lord, Lord Adonis, talked about devolution. My noble friend Lady Maddock talked about local authorities. The noble Lord, Lord Liddle, spoke about cream cakes and Cumbria. The noble Lord, Lord Rogers, talked about cities and urban regeneration. I think we all accept that we have not invested sufficiently in infrastructure in the regions, and that needs to be corrected. We are trying to do it. Chapter 2 of the National Infrastructure Plan is all about getting that right. The underlying, driving theory of HS2 is to empower the northern cities so that they can have the same kind of economics of agglomeration that can drive growth. We have seen it similarly in London.

I agree that there is a link between infrastructure and housing. Battersea is a great example. We guarantee extending the Northern Line and suddenly Battersea creates 30,000 homes. That kind of relationship needs to be worked out right around the world.

In conclusion, we must relentlessly continue our work to deliver the pipeline that we have. It is necessary to work at everything I have talked about—the plan, the money, the delivery—to ensure that consumers and businesses reap the benefits. As I believe we have demonstrated in this Parliament, where there is a clear plan to build and finance the infrastructure that we need and a powerful programme to drive its delivery, then that infrastructure can and will meet its potential to be a real engine of our economic growth.

Autumn Statement

Lord Hunt of Chesterton Excerpts

Thursday 4th December 2014 Lords Chamber

[Lord Lawson of Blaby (Con)]

My Lords, I shall begin by saying that I agree very strongly with my noble friend Lord Wrigglesworth. In no way does it make sense to continue with ring-fencing in the next Parliament. All public expenditure has to be judged on its merits, whichever department happens to be responsible for it.

In the short time we have, I do not want to talk about the particular measures in the Autumn Statement—I will discuss wider issues—save to say one thing. I know that my right honourable friend George Osborne is very anxious to go down as a tax-reforming Chancellor. This year, he has lived up to that with the reform of the annuities system in the spring Budget and the reform of the stamp duty system in this autumn budget—because that is what it is. Both of them are substantial and, in my view, welcome reforms.

On the wider issues, nothing is perfect in this wicked world, but by any reasonable standards the British economy is a success story. It is a success story despite, I have to say, the difficulties of conducting economic policy in coalition with my noble friends the Liberal Democrats. It has made the task immensely harder and I hope that this will not continue and we will be able to conduct policy untrammelled by this complication; it is difficult enough without them. It has also been a success story despite the public deficit having been halved. It is still too big but it has been halved, which puts into perspective the views of the naive Keynesians, some of whom are in our midst. I welcome in particular the consensus we now have between the two major parties that it is important to continue to bear down on the deficit. The two parties may have different ideas about how this should be done, but there is a consensus that it needs to be done.

One of the signs and proofs of the success of the British economy is to be seen across the Channel. The difference between the British economy and the economies of the rest of Europe is striking. There are two main reasons for this. One is that we are not members of the eurozone, which is a disaster. I regret that because I do not wish our neighbours to be suffering under the regime, but there it is. The other reason, which is probably more important, is that the massive range of supply side reforms brought in by the Conservative Governments of the 1980s have made the British economy far more flexible than any other economy of Europe. Fortunately, most of those supply side reforms have stuck. They have endured because even the Labour Party can see that they were successful in the 1980s and have remained a great strength for this country.

Looking ahead, much has been said about the warning lights flashing about the world economy. The world economy is tremendously important to a major trading nation such as ours, but it is very much a mixed picture. There is both bad and good. On the bad side, there is the eurozone, which I mentioned a moment ago, and also the problem of Japan going back into recession despite a massive Keynesian boost. The good is that the emerging world is still powering ahead. Obviously, no one would expect China to continue at the huge rate of growth it was achieving, but it is still growing and so is much of the emerging world. The other thing is the reduction in the oil price, which is hugely beneficial.

What do we need to do to continue with our success? There are two areas of importance. I have not got much time so I will mention one just briefly. We have to do far more to clean up the British banking system, which is so important to us as a great world financial centre and to the rest of British industry. The other thing is that we have to radically change our energy policy. We have an absurd energy policy, predicated confidently by DECC and its Secretary of State on an inexorably rising oil and gas price. In fact, the price has fallen and since the things that made it fall continue to exist, it is likely to continue to be weak. We have moved from a market-driven energy policy to one of state control of everything—and largely unaccountable state control. It is damaging for British industry, damaging for the poor and it is deterring investment in electricity and energy generally. We have to move back to a market policy for energy.

[Lord Hunt of Chesterton (Lab)]

My Lords—

[Lord Lawson of Blaby]

I do not have time to yield to interventions. That is the nature of a debate in which we are limited to five minutes each. We cannot accept interventions. But my time is already over so I will end by saying that I warmly commend my successor-but-five, George Osborne, on his Autumn Statement yesterday and on his stewardship of the economy over the past few years.

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[Lord Hunt of Chesterton]

My Lords, I enjoyed that speech. I join in welcoming the noble Lord, Lord Rose, and comment, which others have not done, that Marks & Spencer has always been a very progressive capitalist organisation. Indeed, one of its founders—Lord Marks, I think—used to contribute openly to the Labour Party, so it obviously knows that that party exists.

The Government’s Autumn Statement was, as expected, an occasion to announce further planning, further cuts in public expenditure and measures to make the UK a less fair and meaner society, which the Chancellor and, indeed, some Ministers seemed to relish, as we heard this morning. One can only be worried that these policies will continue. Over the relevant period, other countries such as the United States put more money into government. If we had had a Conservative Government from 2008 to 2010, doubtless these impacts would have been greater. Over the period in question, many people’s living standards fell and we now have food banks in the UK. Perhaps the one benefit of the Chancellor’s Budget is its provision of money to the churches so their roofs are all right while the food banks operate down below.

The main omission in the Statement is that there is no mention of the greatest fundamental risk to the future of the UK’s economy—that is, the threat posed by the UK leaving the European Union. That has not been mentioned this morning either. That seems to me quite extraordinary. If you were a trader seeking a loan or investment and, while seeking that loan, you did not tell your bank or backers that you were about to deliberately tear up the existing business plan and do something quite different, you would be considered grossly dishonest. Indeed, if you were a director of a company, I believe that you could well be prosecuted for not operating correctly. Perhaps this goes back to the point made by the noble Lord, Lord Palumbo. For example, I know that the noble Viscount, Lord Younger, who made an excellent opening speech but is not in his place, is firmly pro-Europe, although he did not mention that.

However, I want to make one or two positive points. I am sure that we all welcome the financial help given to health workers helping with humanitarian disasters such as the Ebola outbreak in west Africa. The only mention of that by the Chancellor was in connection with inheritance tax but many of these people will have no money to hand on as they are not rich. Surely we should be talking about significant ex gratia payments for people doing this extraordinarily dangerous and important work. I would like the Minister to comment on that.

It is also welcome that the Statement announces that small businesses will benefit. However, it should be remembered that there was considerable concern that the incoming Conservative Government would withdraw the tax relief for R&D. I know this as I am a founder director of a small company in Cambridge. There were many rumours going on all the time in these businesses and we had no idea what was going to happen. For two years we had great uncertainty about this investment. Now we are told that research is terrific and should be invested in, but that is not the way you run a country, with a stop-start process. In fact, Gordon Brown said that we no longer have a stop-go policy—but, of course, that happened under a Labour Government.

The Government’s remarks on infrastructure are another example of stop-go government. When the parties opposite came to power, they immediately cut expenditure on flood protection for no good reason. As Lib Dems generally have to walk around in gum-boots in many of their wetter constituencies, it is rather surprising that they did not demur, as they did not demur on most of the big cuts made by this Government. We are surprised, of course, that it has taken so long for the Government to come round to investing in flood protection. Our colleagues in the Netherlands were astonished by the incompetence which the UK has displayed in this area. Under the Labour Government, a Foresight programme was established which mentioned the need for further investment in flood protection, so now we are learning.

My next point is, again, positive—namely, that the Autumn Statement includes references to further funding for science and technology and that this expenditure should be maintained at an approximately constant level in real terms. The Government have outlined institutions that should be supported and expanded, such as the one in Manchester. However, I was at a meeting this week of a society of which I am a member, where real concern was expressed about the low salaries and weakening job opportunities for scientists. Of course, it is a good thing that there will be loans for postgraduate work but, if at the end of that there are not enough jobs, that is serious. Why will there not be enough jobs? One of the causes, of course, is the considerable uncertainty in the UK, and on the part of our partners, about the UK’s future in Europe. I tabled a PQ and the answer came back that there was uncertainty about that, so whether it is weather forecasting, high-energy nuclear physics, fusion physics or many other areas, doubt has been cast by government policy in that regard.

Finally, this Government, the Treasury and the City of London still do not understand that it is a good thing for the UK to have companies that are owned and based in the UK. Recently, we nearly lost a big pharmaceutical company. Fortunately, it had European directors who did not want to sell it. Now we have Airbus. It is no longer regarded by many people as a significant British company; they consider that we are subcontractors. Again, this is because the Treasury and the City seem to want us not to own businesses but just to have places where the businesses operate in the UK. Surely in the long term we should change that policy.

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[Lord Hunt of Chesterton]

Why not have a toll road? We never have toll roads in this country; perhaps, as a Tory finance person, the noble Lord could tell us why.

Queen’s Speech

Lord Hunt of Chesterton Excerpts

Wednesday 11th June 2014 Lords Chamber

[Lord Hunt of Chesterton (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Cavendish. I do not agree with everything he said, but people’s suspicion of experts is something that I know about from my time running the Met Office. I shall focus my remarks on a very significant point towards the end of the Queen’s Speech regarding the Government’s continuing support for measures to deal with climate change. I want to make a point about how such action should relate to other programmes to do with the environment and its effect on people.

The present position is that there is an upward trend in global warming which is now predicted to exceed 4 degrees over the land areas of the world and continue to produce very considerable effects in terms of disasters such as cyclones, droughts and heat waves. One can see this in many countries. The number of deaths, for example, in natural disasters per year is of the order of 100,000. As for other environmental factors in the world—matters such as air pollution—the World Health Organisation estimates deaths from these will exceed 1.5 million people per year.

Even more serious now is that air pollution affects the youngest of children in Asian cities. There was a rather famous Chinese young lady who lived on the crossroads near Beijing and died of lung cancer. This country is concerned with lung cancer and smoking, but that is a voluntary disease. When children face that kind of situation, it is something that we have to consider. The fact is that there are connections between these natural and human disasters which are worsening as a result of the effects of climate change. One of the effects is to produce longer periods of static wind or conditions such as very high or very low temperatures. There is much evidence to that effect.

One of the other features of the Queen’s Speech is that the Government are continuing their programme of investment in low-carbon power, including nuclear power. I commend the Government on moving ahead on nuclear power and these other programmes. I would point out again that it is important to have an overall system of both nuclear and non-nuclear power because there are periods—as commented on in Germany this winter, and in this House in 2010—when the wind stops, the clouds appear and back-up sources of power are needed.

The UK is working within the international community to minimise climate-related threats. As this debate is focused on international work, I should comment on how we and other countries work with the United Nations agencies and monitor that work. The UK contributes significantly in terms of both finance and expertise to the UN agencies, including the World Bank, the United Nations Environment Programme and the programme for climate change. A worrying point made to me recently by a World Bank official was that although the UK is the second-largest contributor to the World Bank, we have a very much smaller number of experts there than other countries do. As the Germans have large numbers of experts there, what happens when a question on, for example, an urban railway arises? Lo and behold, the World Bank will support a big project proposed by Siemens. Equally, however—as the noble Lord, Lord Low, pointed out—the UK has great expertise in education, science and business, and it is important that we should have the right number of people there to make our contribution. I also support the noble Lord’s remarks on disability and environmental hazards. Many disabled people are particularly vulnerable, for example in floods in cities.

Next year there will be the regular 10-yearly United Nations international disaster reduction meeting. This will take place in Japan and should lead to further scientific and technical improvements. The UK plays a very important role through our insurance industry. Equally, however, we have to use our expertise to provide warnings to communities which might suffer badly.

I feel that progress on some scientific issues is moving rather slowly. It has always been said in the West, and in the United States, that earthquakes are impossible to predict. We heard in a seminar in London that the Russians have two or three institutes that are doing remarkable work in this respect. Earthquakes are now regularly being caused by fracking. The United States Geological Survey—not a very left-wing organisation—has commented that the number of earthquakes in Oklahoma has increased by 300% at the sixth level on the Richter scale. We should consider this at the United Nations meeting. We should also consider—the issue has been raised in debates in this House—the social and economic consequences of natural disasters.

This year and next year will be important for building on the commitment on climate change made at Durban. The targets for the reduction of carbon emissions should be agreed at the meeting in Paris in 2015, with a view to all countries finally agreeing and implementing them by 2020. It is remarkable that at Durban the Chinese agreed to this, and we are expecting Chinese participation.

At the most recent meeting of legislators—in Mexico City this week, which I attended—it was interesting to hear Governments and their delegates expressing their belief that it is important to demonstrate more visibly their commitment to urgently tackling climate change, sometimes through simple means. One example, as the noble Lord, Lord Deben, mentioned, is the use of smart meters in cars to indicate the level of their carbon emissions; or, as in France, to inform drivers on motorways that driving at high speeds is not only dangerous but causes higher carbon-emission levels. I have had no joy in talking to the Department for Transport in this country. It would be progress if people could be shown that they add to the carbon in the atmosphere when they drive fast on motorways.

The recent IPCC report on the social and economic impact of climate change now recommends that national and international policies on carbon reduction should be connected to policies covering the environmental benefits of tackling it—I have mentioned air pollution—as well as the benefits in terms of reducing poverty and vulnerability more generally. Security is also important. The Pentagon takes a strong view on this, to the fury of Republicans in the United States.

There is also the question of the preservation of biodiversity. A number of economists, some of whom are distinguished Members of this House, have the strange idea that we can put off dealing with climate change for decade after decade because—according to their strange calculations—it will become cheaper and cheaper to deal with. In the mean time, however, we are losing biodiversity.

If we are to have an integrated approach it is important that we consider all these factors together. That will be a challenge for the Government. From my time in the Met Office I know that we need to have an integrated approach through international bodies, Governments and civil societies. These integrated measures must first be formulated—universities can play a role in that—and then implemented and then, finally, reviewed by Parliament. In the 14 years that I have been a Member of this House we have had two debates on the United Nations agencies, and I led both of them. It is important that we should review this development and I hope that the Government will support it.

Budget Statement

Lord Hunt of Chesterton Excerpts

Thursday 27th March 2014 Lords Chamber

[Lord Hunt of Chesterton (Lab)]

My Lords, I want to comment on some of the policies on energy, science, technology and exports that were in the Budget speech. I declare an interest as a director of a small company and as an emeritus professor at UCL and Cambridge. Some of the information about science expenditure was in supplementary information provided with the Budget speech and not in the version that we had from the Printed Paper Office. One question that one wants to ask is whether best use is being made of government expenditure on science and technology.

This Government certainly recognise the importance of science expenditure and there is a general feeling that the Chancellor has appreciated this more during his period in office. The previous Labour Government appreciated this, too, and had to overcome the lack of priority given to science and technology by the Thatcher and Major Governments.

The importance of the UK having a highly competitive science and technology area, and of its industrial applications, were raised in a recent report of the House of Lords Science and Technology Committee, which commented on the critical level of funding for parts of the UK scientific infrastructure—which I myself have seen accentuated in the areas of environment and engineering, as well as in atomic physics. That the UK did not have world-leading laboratories in hydraulics was a factor whose implications we saw in the floods of this year.

Importantly, the Chancellor said that policies for science and technology needed to be integrated with increased exports, but one has to recall that when the Conservatives came into power, the first thing they did was to indulge in various ideological decisions such as abolishing the regional development agencies, which were widely supported by industry and business. In Germany and elsewhere, such regional organisations of employers supported by government and local authorities are an important vehicle for encouraging exports. It is rather different from having a man from BIS coming to visit your company. That these organisations across Europe are extraordinary group activities is one of the reasons why they are so strong. As has often been commented on, the way that German industries in local areas work with the banks ensures expansion and adequate finance. It was surprising that the abolition of this very successful and growing area of our business in the UK was supported by the Lib Dems, who I had always thought were supporters of regional power and influence.

If we look at what has happened during the past three years, I suppose that we should be pleased that the Government have seen some of the error of their ways. Mr Willetts, in a rather nicely written piece that I have cited before, explained that when he came to power, he thought that the only thing the Government had to do was to get out of the way of business. He then stated that it was in fact very important that the Government lead, support and work with industry and science and technology to make important developments. A variety of specific initiatives have been taken, one of which was to focus on space. The UK is an important leader in applying work in space in a commercial way, as we saw just last week, with Inmarsat being located in London. That was a brilliant example of UK science and technology being widely recognised and used.

As part of the mea culpa article by Mr Willetts describing the evolution of government policy, he commented that, after being rather suspicious of the Labour Government’s Technology Strategy Board, the Government have become strong supporters of it. Although I did not hear any further mention of expanding it in the Chancellor’s Statement, it would be very interesting to know from the Minister whether that is planned. The amount of money being funded through the TSB is still small compared to the money spent in Germany, for example, through the Fraunhofer centres. The Fraunhofer centres also focus not just on very high-tech but give credit to important technology at the level of everyday living and small businesses—for example, how buildings get damp in strong rain conditions and what you should do about it. One of the Fraunhofer centres deals with that in particular. It was the noble Lord, Lord Sainsbury, who introduced the TSB, as he explains in his book on progressive capitalism.

One feature of the Chancellor’s speech, as of many speeches made by members of the Government, is the total absence of the word Europe. I was very gratified that the noble Lord, Lord Razzall, earlier commented that the most important feature for the long-term strength of UK industry, business, science and technology is that we remain in and active members of Europe.

The word from Brussels now is that because of our tendency under this Government to think of departing from Europe, in many European meetings in Brussels the UK’s point of view is simply ignored. They say, “You guys are on your way out; why should we listen to what you have to say?”. That was said by a senior British civil servant, now in Brussels, who said that the situation was serious. Last night, rather gratifyingly, we heard Mr Clegg talking about Great Britain, not Little England. I hope that that will be a feature of the next election. At the moment, we seem to be run by a Little England party. However, that was on Wednesday. On Tuesday, we had a speech from the Prime Minister saying that we greatly believe in Europe and that Europe is helping us with our development of full employment, so it varies from day to day.

It is important to keep reminding ourselves that areas in which the UK is a world leader are often those projects that we are undertaking with Europe. Airbus is a very important example. Rolls-Royce has only a small proportion of its work in the UK; most of it is now in Germany or in the United States. It is important for the Government to do much more to advertise that. When the Prime Minister flew to Beijing with his big delegation, he did not fly in an Airbus, he flew in a Boeing. When he arrived in Beijing, there was a big notice above his head, shown on television, reading “Boeing”. That is not very clever.

I also want to talk about energy and climate change. The Chancellor spoke about that in his speech and emphasised the fact that the UK is investing strongly in low-carbon sources of energy, particularly nuclear and wind. The fact that the UK is continuing its strong policy is one reason why we have some leadership in the world discussions on climate change. I am a vice-president of GLOBE, and many politicians from all over the world come to see what we are doing, both legally and by our policies. Indeed, our policies are coherent. I have been praising Germany in my speech, but the fact that it has a totally incoherent policy on energy—suddenly switching against nuclear—is a source of great difficulty in Europe.

However, the Government should not become too fascinated by the possibility of cheap gas. I notice that we had a fracking speech earlier this afternoon. The message from US politicians visiting London is that the reason why fracked gas is so cheap in the United States is that, as a result of legislation by President Bush, the costs of providing water for the fracking operation and for cleaning the water after the fracking operation are not attributed to the cost of the gas. In the words of American politicians, the water consumers of America are subsidising the cost of the gas. We need to be very careful about that.

I also notice that the issue rather reminds me of the Labour Government in the 1960s, when they asked whether they could abolish a railway going through Wales. Speaker Thomas, Lord Thomas, said, “Mr Prime Minister, that goes through 24 marginal constituencies”. I wonder whether the fact that fracking of gas would go through a lot of marginal constituencies in Lancashire may be the cause of the delay that we heard about this afternoon. To continue that point, the issue of water is one of the reasons why there was great concern about fracking in the UK; the Institute of Civil Engineers made some remarks about that that have not been explained by the Government.

I come to my last point. The Chancellor emphasised in his speech that the carbon price compensation for energy-intensive industries needs to be considered and implemented. However, it is very important that this is not just a handover of funds. Surely the funds should be handed over with conditions relating to efficiencies and new technologies implemented by the companies that are using this extra funding. In Stoke, for example, in the Potteries, they are using new techniques to make use of the gas coming out of the old coal mines. That kind of energy use should be supported. The other feature that the Government emphasised was the encouragement of combined heat and power. Many noble Lords have been commenting about that for 10 years or more and it is a very welcome development.

Economic Prosperity and Employment

Lord Hunt of Chesterton Excerpts

Thursday 18th July 2013 Lords Chamber

[Lord Hunt of Chesterton]

My Lords, I welcome this debate, which was introduced by my noble friend Lord Haskel, and the remarks made by the noble Lord, Lord Cope, following him, which very much set the tone for the importance of SMEs, which I will touch on. I declare an interest as a director of a small scientific consulting company in Cambridge and former director of the Met Office. I did a quick calculation while listening to the noble Lord, Lord Skidelsky, of what the ratio was of the highest and lowest paid people in those companies and it was somewhere between three and four, which is perhaps a bit less than in the City.

As my noble friends Lord Haskel and Lord Giddens explained, modern economies are partnerships of the public and private sectors. The present Government did not understand this when they came to power. I quote Mr Willetts, who made a speech at the Foundation for Science and Technology, under the watchful eye of the noble Earl, Lord Selborne, the chairman:

“There has been a real shift in thinking”—

that means “our” thinking, Tory thinking—

“over the past few years. Many of us”—

Tories—

“used to think that the only thing Government had to do was to get out of the way. Large numbers of businesses still want that; they simply want lower taxes, easier planning rules, less red tape. Yet an increasing number of businesses and industrial sectors look to Government to play a far more creative role”.

Mr Willetts thinks quickly, of course, and in two years he has learnt what we now all understand. Perhaps the noble Lord, Lord Bates, might have a talk with the new Mr Willetts.

Lessons have, however, been learnt by this fast thinking Government and we now have the Technology Strategy Board, which has survived with some great successes—and I declare an interest as an adviser to the company, Tokamak Solutions, which has benefitted from important input. Nevertheless, many smaller companies, as the noble Lord, Lord Cope, said, find dealing with the TSB and BIS quite difficult, and the general view is that it is often easier for these companies to work through European Commission projects, which are much easier to enter and have been very effective, as I know myself. I also did a recent survey of some companies at the Cambridge Science Park, which also found that working with EC projects was at least as easy, if not easier.

Another important role for the TSB in future might be to assist smaller companies—SMEs—in providing technology to larger companies. In the United States, there is a very strong push by government to ensure that big companies sponsor smaller companies and use their products. The same thing does not happen so widely here in the UK. We need a survey of these developments. I hope that in winding up the Minister will explain these Damascene conversions of the Government, how current regional development assistance compares with the previous RDAs, and whether it meets the ambitions of the noble Lord, Lord Heseltine, for this.

What can the UK learn from the industrial and technology policies of Germany, France, and the USA, which we have been hearing about? One matter that we have not discussed is industrial democracy, which is no longer a very fashionable term. There was a great report by Lord Bullock in the 1970s. One of the important roles of the supervisory board in Germany, as some leading businessmen have told me, is its considerable breaking effect on the business of buying and selling companies. It sometimes seems that companies in Britain are just a higher form of gambling—buying and selling and buying and selling. The Evening Standard gets frightfully excited when there is more buying and selling. For the workers, however, this is not always brilliant, and in Germany there is a clear way of looking at this.

Nevertheless, despite the normal Manchester economic liberalism of the Treasury, it is now looking at the idea that industrial democracy, or employee partnership, might have some advantages. Everybody knows that when companies have strong employee involvement—notably, John Lewis—they tend to use UK suppliers, and they help to support other British companies. If a company is bought by an overseas company, it might put together cars, for example, but a lot of the research is often done abroad. I note the example of my noble friend Lord Bhattacharyya, who has been very successful in getting excellent research by incoming investing companies, but this does not always happen, as we have seen with the utilities and other companies.

Another feature of the question whether business is to provide services for the community or a higher form of gambling is that there is now a tendency to think that high-tech science is also a form of high-tech gambling—you find a company, its shares shoot up, it goes on the stock exchange, you sell it, then poof, off you go. I am afraid to say that we have seen a lot of that in the UK. If, in receiving government money, these companies had to ensure a much clearer relationship with the community and the Government, we might very well stop this gambling. I have friends now living in rather exotic places around the world because their companies went whoosh, and off they went. This is not business, it is not science, and it is not helping the country.

Mr Willetts also learnt through government laboratories, in his fast-thinking mode, that technology is very important. We used to have the world famous Royal Aircraft Establishment and the Royal Radar Establishment. Where are they? We had the National Physical Laboratory, which Sir Keith Joseph went to visit and which does survive. When he saw annual reports of research on the shelves of that laboratory, he said, “Why do you do that?”. Of course, Sir Keith Joseph went to Oxford and did not understand science. There are brilliant scientists at Oxford, but All Souls has a problem.

Nevertheless, despite these trends, we have world-famous laboratories. The Met Office has a world-famous laboratory, and we have others run by the Government. The important thing is to ask where we go from here when we have lost many of our laboratories in electricity, hydraulics, gas and so on. What are we going to do? We need a stronger effort to work in partnership with Europe, which has the world’s greatest laboratories, as we have seen with CERN and the European weather centre—and I helped to set up a thing called Ercoftac, which brings together all the aerospace companies and universities across Europe. This is the kind of networking approach that we need. I hope that some of these suggestions will be useful.

Queen’s Speech

Lord Hunt of Chesterton Excerpts

Wednesday 16th May 2012 Lords Chamber

[Lord Hunt of Chesterton]

My Lords, it is a pleasure to welcome the noble Lord, Lord Ashton of Hyde, to this House. As my noble friend Lord Myners mentioned, the noble Lord was at Eton College. I used to play soccer for Westminster against Eton College. We used to draw honourably, so that was all right. The noble Lord’s background, as he described to us, was in the City—although I might make a party political point here. He said that it was natural that he should be a supporter of the coalition. For somebody who is in insurance to back something as risky as the coalition seems to me not at all clear, so maybe he would like to reconsider his evaluation of risk in that context.

It was of course very interesting to hear the noble Lord’s wise remarks about regulation. I am an applied mathematician and I think that I have worked with all his companies, which are involved in the Lighthill Risk Network involving academics and the City. That was extremely interesting, as the way in which the City has developed risk methods in computers and mathematics is an important part of the world and Lloyd’s of London is a great leader. The breadth of the experience of the noble Lord, Lord Ashton, from hunting through to the Army and in insurance, will, I am sure, make him a very welcome Member of this House.

Turning to my remarks on the Queen’s Speech, I hope noble Lords will have learnt that there is a new principle afoot in this House enunciated yesterday by the noble and learned Lord, Lord Howe. He said, more or less, that if an issue is not in the Queen’s Speech, you had better look it up in Magna Carta to see whether the same issue was discussed. He was referring to standardisation of the measurements of wine and corn, which are well discussed in Magna Carta but were somewhat absent from the Queen’s Speech. In my case, I should like to speak on the environmental issues, which are extremely important. They were mentioned well in the Magna Carta, with its references to the responsibilities of office holders and landowners to maintain as guardians the natural environment and resources of this country—forests, rivers and fish.

In the constitutions of several other countries, the Kings and the Parliaments are given clear responsibilities for the environment. In Malaysia, where I was recently visiting, the King—the Yang di-Pertuan Agong—has to maintain 50 per cent of the land for natural forests. That is a remarkable commitment, which I was pleased to hear from local business is supported. The British Parliament has, over the years, had an international reputation for some of its legislation, from the Clean Air Acts and the formation of the National Trust to the Climate Change Act. Perhaps a reformed House of Lords, with its legislators having several years without electoral pressures, should have certain special responsibilities. The United States Senate is responsible for treaties. For the reformed House of Lords—perhaps with our new Magna Carta—we should have special responsibilities for the environment, natural resources and even the long-term existence of the UK. The Netherlands Government have an Act of Parliament in which their coastline is fixed but, as a debate in the Lords in 2000—my first debate—pointed out, the United Kingdom does only cost/benefit analysis as to whether the coasts are defended as the sea level rises with climate change and the post-ice age land movements continue.

As the noble Baroness, Lady Wilcox, who is a practical environmentalist with her interest in fish, reminded us, the government programme in the Queen’s Speech has two major Bills to be considered, one of which is on energy and the other on water. The Bill on energy aims to ensure that the UK has adequate power supplies that minimise carbon emissions and have different components to ensure security. We need wind and solar power systems but, since these can fail in critical weather conditions that are becoming more frequent with climate change, nuclear power or other clean fossil fuels, such as those with carbon sequestration, also need to be part of the system. I applaud this Government for continuing the previous Government’s solid policy in this direction.

However, I criticise the Government for failing to argue strongly enough about the importance of the continued reduction of carbon emissions, not only by power stations but also by traffic. We are no longer run by Mr Toad at the Department of Transport, going faster and faster, but it is nevertheless important to point out that there is a strong connection between the short-term health benefits of reducing emissions from traffic as well as the long-term benefits of dealing with climate change. The Government should focus on the short-term benefits to explain to people why dealing with carbon emissions is important. They should not be bamboozled by certain Lords, and their well oiled propaganda machine, who continue to comment that there is no such thing as climate change. In fact, temperatures over the land areas of the world and the surface layers of the ocean are steadily rising, as is sea level. Desertification and drought are increasing. Some of the records in peak rainfall are one of the greatest climate change concerns to south-east Asia and southern China. Peak rainfall records are being broken year on year. They are now up to 150 millimetres an hour from about 100 millimetres an hour 20 years ago. The Governments of Brazil, Mexico, China and Indonesia are all introducing legislation. Of course, all of these countries remarkably agreed at the Durban meeting of the United Nations Framework Convention on Climate Change to develop a road map for an international treaty after 2015. The idea that the world is moving away from climate change is simply not correct.

We all support the government objective in the Queen’s Speech of expanding the UK economy, especially its exports. However, I am afraid that many companies and officials think that the UK Government could do a lot more to help export UK products and expertise in environmental technology. Small and medium-sized enterprises—I declare an interest as the chairman of an SME in Cambridge—need some kind of project financing and travel expenses to promote their products. I hasten to say that our own company does not seek this, but many SMEs have spoken to me about this issue. They compare the situation unfavourably with the support given by foreign Governments to their companies. This is why Governments in Asia, I am told by officials, are often asking “Where are the Brits?” at trade fairs and other events that are trying to promote environmental technology. UK officials are too embarrassed, they tell me, to say that the UK Government hardly covers expenses so that SMEs cannot attend these trade fairs.

An equally serious limitation is the UK Government’s technical agencies not being encouraged to use their expertise and people to promote UK technology. I know this—I used to be head of the Met Office. The House of Commons Science and Technology Select Committee is looking into this. Two years ago, at the beginning of the previous Session of Parliament, the noble Baroness, Lady Wilcox, reported on how all this would change, but I am afraid that I have not seen that, nor have I heard it from officials or indeed SMEs.

One of the great successes of this Government in environmental technology is in the development of satellites and remote sensing. I applaud them for that. However, this success also needs more government support. Last week there was a great crisis in the observation of the Earth’s systems and data as one of the most important older satellites ceased operating and no new ones are planned. There were leaders this week in the Economist—most unusual in the Economist on such a technical question—and Nature pointing out this crisis. Without data from these instruments, it will be impossible to provide warnings about natural disasters and long-term climate change.

Government plans for the G8 meeting in 2013 to focus on security and prosperity while monitoring and sustaining the environment are also important and there is great scope for international collaboration and trade to come out of that meeting.

EU: Budget

Lord Hunt of Chesterton Excerpts

Monday 10th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, I sincerely hope that we will not; anyway, I am sure that I will not be here giving those Answers for 15 years. We are making progress: the number of areas of qualification of the budget is going down and the level of fraud has been significantly reduced and is at a very low level, so there are certainly improvements in the detailed audits coming forward. However, that is occurring within a total picture which, I repeat, is not acceptable. We must work towards achieving more progress.

[Lord Hunt of Chesterton]

My Lords, does the Minister agree that many important projects and finances come through our involvement with the European Union which are valuable in areas ranging from agriculture to manufacturing? He should be well aware that, if there is excessive interest in detailed financing and control, it will be very difficult for these projects to operate.

[Noble Lords]

Oh!

[Lord Hunt of Chesterton]

You just have to listen to all the important manufacturers who find involvement in Europe extremely valuable. I hope the Government will ensure that this support is effective as well as valuable.

[Lord Sassoon]

My Lords, we are taking steps—for example, I think that we are one of only three or four countries which voluntarily publish audited statements on the way that co-managed funds are used in the UK. As a country we are doing everything to make the UK accounts as transparent and thoroughly audited as any, and the European Commission has noted that with approval. It is depressing that in agriculture, the largest area of spend, the error rate found by the auditors is going up.